Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Goldman Sachs President & COO Gary Cohn on "Fast Money Halftime Report" (M-F, 12-1PM ET) today. Following is a link to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000187032&play=1.

All references must be sourced to CNBC.

SCOTT WAPNER: HE IS LLOYD BLANKFEIN'S TRUSTED ADVISOR AND RUNNING WALL STREET'S MOST PROFITABLE AND POWERFUL FIRM. BUT RECENTLY GOLDMAN SACHS HAS DRAWN CONTROVERSY FOR ITS HANDLING OF ITS COMMODITIES BUSINESS. CNBC'S KATE KELLY IS HERE WITH AN EXCLUSIVE INTERVIEW WITH GOLDMAN''S GARY COHN. KATE, TAKE IT AWAY.

KATE KELLY: THANKS SO MUCH,SCOTT. I'M HERE WITH GARY COHN, PRESIDENT OF GOLDMAN SACHS, WHO IS GOING TO SPEAK TO US ABOUT SOME IDEAS THAT WERE JUST RELEASED BY GOLDMAN ABOUT HOW TO SORT OF EASE THE QUEUES IN TERMS OF WAITING FOR METAL OUT OF STORAGE. THE NEW YORK TIMES ABOUT A WEEK AND A HALF AGO ESSENTIALLY ACCUSES YOU GUYS OF MOVING METAL FROM ONE STORAGE UNIT TO ANOTHER JUST TO DRIVE UP THE PRICE OF STORING THE METAL. WHAT DO YOU HAVE TO SAY TO THAT? IS THAT TRUE?

GARY COHN: KATE, THANKS FOR HAVING ME TODAY. LET ME START WITH A COUPLE FACTS HERE. METRO IS A COMPANY THAT GOLDMAN SACHS OWNS. METRO RUNS A WAREHOUSING OPERATION IN DETROIT WHICH I THINK YOU HAVE BEEN TO. METRO DOES NOT OWN THE METAL IN THE WAREHOUSE. THE METAL IN THE WAREHOUSE IS CUSTOMERS. WHAT METRO DOES WITH THE METAL IS WHAT THEY'RE TOLD TO DO BY THE CUSTOMERS THAT ACTUALLY OWN THE METAL. SO TO THE EXTENT METAL IS MOVING, IT'S MOVING AT THE DIRECTION OF THE CLIENT.

KELLY: RIGHT. OKAY. SO WHY DID INVENTORIES BUILD UP IN RECENT YEARS? WHY DID WE SEE THESE PILEUPS AS WELL AS THESE LONG WAITS TO GET THE METAL OUT?

COHN: I KNOW YOU'RE WELL AWARE OF THE COMMODITY MARKETS AND HOW CYCLICAL THEY ARE. IN THE 2008-2009 RECESSION, GLOBAL RECESSION, ALUMINUM PRODUCERS CONTINUED TO PRODUCE ALUMINUM.THERE WERE NO REAL MARGINAL BUYERS AS YOU SAW INDUSTRIAL PRODUCTION GO DOWN,CAR MANUFACTURING GO DOWN, ALL OF THOSE NATURAL CONSUMERS OF ALUMINUM CONSUMED LESS METAL. THOSE PRODUCERS ENDED UP NEEDING TO MONETIZE THAT METAL AND SEND IT SOMEWHERE TO KEEP THEIR OPERATION GOING. THAT'S THE FUNCTIONALITY OF THE TERMAL EXCHANGE AND THAT'S THE FUNCTIONALITY OF SENDING IT TO THE EXCHANGE TO BE ABLE TO MONETIZE THAT ASSET. SO IN THE 2008, 2009 PERIOD YOU SAW AN ENORMOUS AMOUNT OF METAL MOVE INTO THE WAREHOUSE SYSTEM WHICH IS EXACTLY WHY THE WAREHOUSES AND WHY THE FUTURES EXCHANGES HAVE BEEN ESTABLISHED, TO ALLOW PRODUCERS TO MODULATE SUPPLY AND DEMAND, AND ON THE OTHER SIDE, ALLOW CONSUMERS TO MODULATE SUPPLY AND DEMAND.

KELLY: OK, BUT RIGHT NOW,ACCORDING TO THE NEW YORK TIMES, THE WAITS FOR THIS METAL HAVE GONE FROM SIX WEEKS TO 16 MONTHS SINCE YOU BOUGHT METRO IN 2010 AND CONSUMERS IN SOME CASES ARE COMPLAINING THAT THE WAIT IS TOO LONG. WHAT DO YOU HAVE TO SAY TO CONSUMERS AND WHAT CAN YOU DO TO HELP THEM?

COHN: WE FEEL HORRIBLE FOR CONSUMERS IF THEY CAN'T GET METAL. WE DON'T BELIEVE THAT TO BE THE FACT. WE IN THE LAST WEEK OR SO HAVE GONE OUT TO PRODUCERS IN THE UNITED STATES AND BEEN ABLE TO SECURE METAL. WE'VE GONE TO OUR CONSUMING CLIENTS, AND WE'VE OFFERED TO TAKE THEIR IN QUEUE WARRANT AND DELIVER THEM PHYSICAL METAL AS SOON AS THEY NEED IT. SO FAR WE HAVEN'T FOUND A CONSUMER THAT NEEDS TO DO THAT TRANSACTION WITH THIS.

KELLY NOT A SINGLE PERSON HAS TAKEN YOU UP ON IT.

COHN: SO FAR NOT A SINGLE PERSON.

KELLY: SO DO YOU THINK THIS WHOLE SORT OF SET OF CRITICISMS WAS POLITICALLY MOTIVATED?

COHN: I DON'T KNOW.

KELLY: OKAY. HERE IS A BROADER QUESTION. WHY ARE YOU GUYS IN COMMODITIES – PHYSICAL COMMODITIES A TALL? THIS IS A BUSINESS YOU'VE BEEN IN AND OUT OVER THE YEARS. RIGHT NOW YOUR HOLDINGS INCLUDE NOT JUST METRO, WHICH IS BASED OUTSIDE OF DETROIT, BUT OPERATES GLOBALLY, CORRECT? WITH A BUNCH OF BASE METALS AS WELL AS WIND FARMS IN INDIA, COLOMBIAN COAL MINES. SOME OF THESE ACQUISITIONS YOU'VE MADE,PARTICULARLY IN RECENT YEARS, WHY IS THIS VALUABLE TO GOLDMAN? WHY IS IT A COMPLIMENT TO YOUR BUSINESS?

COHN: WE'RE IN A CLIENT-FACING,CLIENT-SERVICE INDUSTRY. OUR BIGGEST SKILL SET, WHAT CLIENTS COME TO US FOR IS TO HELP THEM WITH RISK MANAGEMENT. THEY COME TO US FOR CURRENCY RISK MANAGEMENT, THEY COME TO US FOR INTEREST RATE RISK MANAGEMENT, THEY COME TO US TO HELP THEM MANAGE CREDIT SPREADS AND THEY COME TO US TO HELP THEM MANAGE COMMODITY RISK. COMMODITY RISK IS A MAJOR COMPONENT OF RISK TO MANY OF OUR CLIENTS. WE NEED TO BE ABLE TO PROVIDE THEM THAT RISK MANAGEMENT. TAKE AN AIRLINE, FOR EXAMPLE. AN AIRLINE ONCE THEY GO OUT AND BORROW THE MONEY AND BUY THE JETS, THE BIGGEST OPERATING FACTOR THEY HAVE IS JET FUEL. AN AIRLINE CAN'T LIVE IN A WORLD WHERE THEY'RE PAYING THE SPOT PRICE FOR JET FUEL EVERY DAY AND HAVE NO IDEA HOW TO PRICE THEIR TICKETS. THEY NEED TO GO OUT AND THEY NEED TO GET A LONG-TERM CONTRACT FOR SUPPLY OF JET FUEL AT A FIXED PRICE OR A RELATIVELY FIXED PRICE. WE'RE THERE TO PROVIDE THAT FOR THEM. WE ARE WILLING TO SUPPLY AN AIRLINE WITH A FIXED PRICE LONG-TERM JET FUEL CONTRACT. AND THAT'S THE WAY THE MARKET WORKS AND, THEREFORE, THE AIRLINE CAN RUN THEIR BUSINESS VERY EFFECTIVELY BECAUSE THEY UNDERSTAND THE COMMODITY PRICE RISK JUST LIKE THEY UNDERSTAND INTEREST RATE RISK OR CURRENCY RISK.

KELLY: BUT THEN WHY DO YOU NEED TO ALSO HOLD PHYSICAL COMMODITIES AS A WAY TO MAKE THAT HAPPEN? WHAT'S THE CONNECTION THERE?

COHN: WELL, IN THAT JET FUEL TRADE, WE MAY BE ACTUALLY DELIVERING JET FUEL TO THE CLIENT. SO THE CLIENT MAY HAVE CONTRACTED WITH US TO DELIVER JET FUEL TO THEM. WE ALSO TRADE IN THE FINANCIAL MARKETS. SO A LOT OF OUR HEDGING HAPPENS IN THE FINANCIAL MARKETS. WE NEED TO MAKE SURE THAT THE FINANCIAL MARKETS COMPLETELY MIRROR THE PHYSICAL MARKET. WHEN THE FINANCIAL MARKET COMES INTO SPOT, THAT SPOT PRICE HAS TO BE IDENTICAL TO THE PHYSICAL PRICE. IF NOT, OUR END CLIENT HAS AN INEFFICIENT HEDGE ON. OUR ABILITY TO TAKE DELIVERY OR MAKE DELIVERY ON A FUTURES EXCHANGE OR IN A PHYSICAL MARKET, MAKES SURE THAT THOSE FINANCIAL MARKETS AND PHYSICAL MARKETS END UP PRICING AT THE EXACT SAME PRICE AND OUR CLIENTS HAVE A PERFECTLY CORRELATED HEDGE.

KELLY: SO JPMORGAN SAID ON FRIDAY THEY'RE LARGELY GOING TO GET OUT OF PHYSICAL COMMODITIES AND AS PART OF YOUR ANNOUNCEMENT TODAY, YOU ARE NOT SAYING THAT YOU'RE SELLING METRO. WILL YOU SELL OUT OF PHYSICAL COMMODITIES ANYTIME IN THE NEAR FUTURE? ARE YOU WORRIED ABOUT THE SEPTEMBER DEADLINE WHERE IT WILL HAVE BEEN FIVE YEARS SINCE YOU BECAME A BANK HOLDING COMPANY WHICH COULD TRIGGER THE NEED FOR SOME DISPOSITIONS?

COHN: COMMODITY HEDGING IS A CORE COMPETENCE AND ONE OF THE MOST IMPORTANT THINGS WE DO IN THE FIRM AND OUR CLIENTS REALLY NEED US TO BE IN THAT BUSINESS. WE ARE STAYING IN THE COMMODITY HEDGING BUSINESS. AS FAR AS METRO, WE BOUGHT METRO UNDER A PRIVATE EQUITY EXEMPTION. THAT EXEMPTION ONLY GIVES US A TEN-YEAR HOLDING PERIOD.

KELLY: SO TIL 2020.

COHN: WE'VE ALREADY OWNED IT FOR THREE YEARS. WE'RE 30% OF THE WAY THROUGH OUR LIFE HOLDING PERIOD FOR METRO. WE WILL END UP SELLING METRO AT AN APPROPRIATE TIME.

KELLY: OKAY. LET'S TALK ABOUT THE MARKETS SINCE WE HAVE YOU HERE. LLOYD BLANKFEIN WAS ON OUR AIR IN LATE JUNE. HE SAID HE THINKS THE ECONOMY HAS STABILIZED. IT HAS ROOTED – I BELIEVE THAT WAS HIS WORD. HE HAS SAID OVER THE PAST THAT HE THINKS VALUATIONS IN THE U.S. PARTICULARLY ARE REASONABLE. IT'S THE BEST PLACE TO DO BUSINESS. DO YOU AGREE AND CAN YOU ELABORATE ON YOUR CURRENT MARKET OUTLOOK?

COHN: I AGREE WITH THAT. WE SEE IT IN OUR CLIENT FRANCHISE EVERY DAY, THAT THINGS HAVE STABILIZED. IN THE LAST WEEK I HAVE BEEN TO ATLANTA, TO CLEVELAND, I HAVE BEEN MEETING WITH A BUNCH OF DIFFERENT CORPORATIONS AND EVERYONE IS SORT OF GIVING US THAT SAME FEEDBACK, THAT WE HAVE STABILIZED AT THIS LEVEL. THERE'S NOT A LOT OF OPTIMISTIC GROWTH IN CEOs' FORECAST BUT THERE'S A BUNCH OF STABILITY IN THEIR FORECAST. I THINK THE BIG WILDCARD OUT THERE TO SOME EXTENT IS WHAT'S GOING TO HAPPEN IN THE INTEREST RATE CYCLE AND WHAT'S GOING TO HAPPEN IN THE PICTURE AND OBVIOUSLY FRIDAY WILL BE AN IMPORTANT DAY.

KELLY: I WANT TO GET TO RATES IN A SECOND, BUT WHY ARE WE SEEING SUCH AN EBULLIENT EQUITIES RALLY AND HOW LONG IS THAT GOING TO CONTINUE?

COHN: WE'RE SEEING AN EBULLIENT EQUITY RALLY FOR A MULTITUDE OF REASONS. NUMBER ONE, EQUITIES ARE STILL CHEAP. IF YOU LOOK AT CORPORATES IN THIS COUNTRY, THEY HAVE DONE A VERY GOOD JOB OF MANAGING THEMSELVES. THEY HAVE NOT GROWN TOP LINE REVENUE AS FAST AS WE'D LIKE TO SEE THEM BUT THEY'VE GROWN BOTTOM LINE EARNINGS AND THEY'VE GROWN EPS, AND THEY'VE BEEN VERY DILIGENT AND RIGOROUS ABOUT MAKING SURE THEY'RE RETURNING VALUE TO SHAREHOLDERS THROUGH STOCK REPURCHASES, THROUGH DIVIDENDS. ALL OF THOSE THINGS ARE HAPPENING OUT THERE AND INVESTORS FEEL LIKE THAT'S A GOOD PLACE FOR THE MONEY. IT'S A BETTER PLACE THAN THE ALTERNATIVE,GOING INTO THE FIXED INCOME MARKETS. IF YOU GO IN THE FIXED INCOME MARKETS RIGHT NOW, YOU KNOW WHAT YIELD YOU'RE GETTING. IT'S NOT THAT GREAT. IF WE END UP GETTING A BACKUP IN YIELDS, YOU WILL LOSE PRINCIPLE. SO THE EQUITY MARKETS PROVIDE A VERY GOOD ALTERNATIVE AND A VERY GOOD RETURN FOR INVESTORS RIGHT NOW.

KELLY: SO YOUR CFO SAID RECENTLY ON AN EARNINGS CALL THAT RETURNING TO A MORE NORMAL INTEREST RATE ENVIRONMENT ACTUALLY FEELS KIND OF GOOD. CAN YOU ELABORATE ON THAT A LITTLE BIT AND DO YOU THINK THAT WE ARE GOING TO SEE A FLURRY OF ADDITIONAL M&A? WE'VE ALREADY SEEN SOME RECENT DEALS, BUT WILL WE SEE MORE OF THIS IN THE NEAR TERM AS PEOPLE PREPARE FOR HIGHER RATES AND HIGHER FINANCING COSTS?

COHN: AS CORPORATE CONFIDENCE GROWS, WE WILL SEE MORE M&A ACTIVITY. AS OUR CLIENTS GET MORE SURE ABOUT WHERE THEY THINK THE ECONOMY IS GOING, WHERE THEY THINK THE ENVIRONMENT IS GOING, WHAT THE GEOPOLITICAL ENVIRONMENT IS, THEY WILL BE MORE THAN HAPPY TO TRY AND EXPAND AND CREATE BIGGER COMPANIES THROUGH ACQUISITION.

KELLY: I'D BE REMISS IF I DIDN'T ASK YOU ABOUT A COUPLE NEWS ITEMS. SAC CAPITAL. YOU GUYS ARE A KEY PRIME BROKER TO THEM. THEY WERE INDICTED LAST WEEK. NO CORPORATE FIRM HAS EVER SURVIVED ONE OF THESE INDICTMENTS. HOW ARE THEY FARING IN THE MARKETS AND HAVE YOU PUT ANY TRADING LIMITS ON YOUR DEALINGS WITH THEM?

COHN: WE CONTINUE TO DO BUSINESS WITH SAC CAPITAL. THEY'RE AN IMPORTANT CLIENT. THEY HAVE BEEN AN IMPORTANT CLIENT TO US, AND THAT'S WHERE WE ARE WITH THEM.

KELLY: SO NO CHANGE TO THE LENDING FACILITIES THAT YOU PROVIDE AS A PRIME BROKER?

COHN: WE HAVE NOT CHANGED WHAT WE ARE DOING WITH THEM.

KELLY: AND NO CHANGES TO THE TRADING ACTIVITIES?

COHN: WE CONTINUE TO TRADE WITH THEM AND THEY'RE A GREAT COUNTERPART.

KELLY: FABRICE TOURRE, ON TRIAL IN LOWER MANHATTAN. JURORS DELIBERATING RIGHT NOW. IS HE GUILTY OF MISLEADING INVESTORS AS A PART OF THAT COMPLEX SECURITY HE WAS A PART OF SEVERAL YEARS AGO?

COHN: WE DON'T BELIEVE SO, BUT, AS YOU SAID, THERE'S A JURY DELIBERATING.

KELLY: DO YOU HAVE ANY EXPECTATIONS ON THE OUTCOME?

COHN: OF COURSE I HAVE EXPECTATIONS.

KELLY: WELL YOU DON'T BELIEVE HE'S GUILTY, BUT I'M WONDERING WHAT THE JURY WILL SAY. HAVE YOU FOLLOWED THE TRIAL?

COHN: I'VE FOLLOWED THE TRIAL, YES.

KELLY: AND YOU'RE NOT GOING TO GO FURTHER ON THAT ONE?

COHN: I FOLLOWED THE TRIAL.

KELLY: OKAY. FINAL QUESTION, I'M JUST CURIOUS, GOLDMAN SACHS, WONDERING WHETHER YOU ARE PLANNING TO GET OUT OF ANY BUSINESSES AND TRY TO STREAMLINE THINGS GOING FORWARD JUST IN ORDER TO TAKE BETTER SHAREHOLDER VALUE IN ORDER TO INCREASE RETURNS?

COHN: KATE, YOU SAID IT YOURSELF. WE ARE FIDUCIARIES FOR OUR SHAREHOLDERS. WE'RE ALWAYS EVALUATING OUR FOOTPRINT, WE'RE EVALUATING OUR BUSINESS MIX, WE'RE TRYING TO OPTIMIZE IT FOR OUR SHAREHOLDERS. WE'RE LOOKING AT BUSINESSES ALL THE TIME. HOW DO WE IMPROVE THEM, HOW DO WE CREATE HIGHER RETURNS, RETURN ON CAPITAL, RETURN ON EQUITY,RETURN ON BALANCE SHEET. HOW DO WE REALLOCATE THE SCARCE RESOURCES OF BALANCE SHEET CAPITAL, RISK, HUMAN CAPITAL. AND WE'RE DOING THAT ON A CONSTANT BASIS AND THAT'S WHAT OUR SHAREHOLDERS WANT US TO DO AND WE UNDERSTAND THAT'S OUR OBJECTIVE.

KELLY: YOU'RE NOT GETTING OUT OF COMMODITIES ANYTIME SOON, BUT YOU WOULDN'T RULE OUT HIVING OFF ANOTHER TYPE OF BUSINESS?

COHN: THERE'S NOTHING OBVIOUS TO ME THAT WE'RE GETTING OUT OF. WE EVALUATE OUR BUSINESSES ON A PRETTY CONSTANT BASIS AND THERE'S NOTHING THAT LOOKS OBVIOUS TO ME. COMMODITIES IS IMPORTANT TO US JUST AS INTEREST RATE HEDGING IS IMPORTANT, JUST AS CURRENCY HEDGING IS IMPORTANT, JUST AS CREDIT TRADING, M&A, ADVISORY, FINANCING –ALL OF THOSE BUSINESSES – THE ASSET MANAGEMENT BUSINESS IS VERY IMPORTANT TO US. THAT'S THE MIX OF WHO WE ARE. WE'RE A DIVERSIFIED FINANCIAL SERVICE COMPANY. WE WANT TO CONTINUE TO BE A DIVERSIFIED FINANCIAL SERVICES COMPANY.

KELLY: GARY, THANK YOU SO MUCH FOR BEING WITH US. JUDGE, RIGHT BACK TO YOU.

WAPNER: ALL RIGHT, KATE.THANKS. OUR THANKS TO GARY AS WELL.

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